The profit earnings of microfinance institutions (MFIs) surged by an impressive 89.10 percent over the past year, largely driven by lower borrowing costs following a decline in bank interest rates.
According to data from Nepal Rastra Bank, 50 MFIs reported a combined net profit of Rs 4.79 billion as of mid-January in the current fiscal year. During the same period in the previous fiscal year, their total net profit stood at Rs 2.53 billion.
Among the top performers, Chhimek Laghubitta Bittiya Sanstha posted a net profit of Rs 576.09 million between mid-July 2025 and mid-January 2026, marking a 12.55 percent increase. Deprosc Laghubitta Bittiya Sanstha secured the second position with earnings of Rs 442.91 million, reflecting a significant 80.30 percent rise.
The sharp increase in MFI profitability is primarily attributed to a substantial decline in interest rates at banks and financial institutions (BFIs). Compared to the base rate of around 10 percent during the same review period last year, rates have nearly halved this year, partly due to BFIs’ inability to expand their loan investments.
